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The BDS Movement’s Failure to Derail Israel’s International Relations or Economy: Mitchell Bard, Jerusalem Post, Aug. 12, 2015 — The press is full of dire warnings that Israel is isolated and growing more so, and that the boycott, divestment, sanctions (BDS) movement is having a devastating impact on the Israeli economy.
The Startup Scene in Israel is Going Bonkers, and the Chinese are Swooping In: Julie Bort, Business Insider, Aug. 13, 2015— This summer, it’s raining unicorns — tech startups valued at more than $1 billion — and as a result the Israeli tech scene is going absolutely crazy.
India Seeks Israeli Help to Become Next “Start Up Nation”: Legal Insurrection, Aug. 18, 2015 — While Europe has been busy targeting Israeli researchers, artists and filmmakers in recent days, Asian countries like India, China and Japan are taking tangible steps strengthening its ties with Israel.
Driven by the Mother of Ambition: Tycoon Yosi Vardi on the Culture That Forged £25bn Pharma Deal: Rupert Steiner, Daily Mail, July 29, 2015 —He is known around the world as the godfather of the start-up industry. Angel investor Yossi Vardi made £250million selling instant messaging application ICQ to AOL in 1998 at the height of the dotcom boom.
Israel’s Cabinet Approves Regulatory Scheme for Gas-Field Development: Sara Toth Stub, Wall Street Journal, Aug. 16, 2015
Israel Turns to Kurds for Three-Quarters of its Oil Supplies: David Sheppard, John Reed & Anjli Raval, Financial Times, Aug. 23, 2015
Israeli Geneticists Offer Exam to Presage Cancer 15 Years Prior to Earliest Symptoms: Jewish Press, Aug. 17, 2015
Improving Ties Between India and Israel: Prof. Efraim Inbar, BESA, Aug. 6, 2015
THE BDS MOVEMENT’S FAILURE TO DERAIL ISRAEL’S
INTERNATIONAL RELATIONS OR ECONOMY
Mitchell Bard
Jerusalem Post, Aug. 12, 2015
The press is full of dire warnings that Israel is isolated and growing more so, and that the boycott, divestment, sanctions (BDS) movement is having a devastating impact on the Israeli economy. It’s no mystery that Israel is politically at loggerheads with much of the world over the disastrous Iran deal, settlements and inaction on the peace process; nevertheless, diplomatic ties remain intact. Moreover, despite the desperate hopes of the BDS campaign, economic ties are flourishing.
Overall, Israeli exports have grown from around $5 million in 1948, to more than $47 billion in 2014. Israel’s largest single trade partner remains the United States, despite political tensions between the political leaders. The total volume of trade in 2014 was $36 billion. In addition, each of the 50 states benefit from their ties with Israel. In 2014 alone, 21 states exported more than $100 million worth of goods to Israel, led by New York with exports of more than $5 billion.
Israel’s relations are even more strained with the European Union and yet trade with the EU exceeds that of the U.S. Roughly one-third of Israel’s imports and exports are a result of trade with the EU. Moreover, total trade with the EU has grown from approximately $21 billion in 2003 to $34 billion in 2013. Countries outside of the EU, the EFTA-bloc countries such as Denmark, Sweden, and Norway, have taken, or seriously considered economic sanctions against Israel. Still, Israel enjoys a free trade agreement with EFTA-bloc countries and business with these nations remains robust.
The central hub of the BDS movement is in England, but the various votes by academic and trade associations for boycotts have had virtually no tangible impact. In fact, total bilateral trade amounted to a record $6 billion in 2014, an increase of more than 7 per cent from the previous year.
The biggest economic story is the exponential expansion of Israel’s trade with Asia, which will overtake the U.S. as Israel’s second biggest export destination this year. China is already Israel's third-largest trading partner; in fact, since formally establishing diplomatic relations with China in 1992, trade has increased 220-fold from $50 million in 1992 to $11 billion in 2014. In addition, total trade between Israel and Japan reached $2.3 billion in 2014.
Israel’s relations with India have been steadily improving, as evidenced by the planned 2015 visit of Narendra Modi to Israel, which will make him the first Indian prime minister to go to Israel. Since the establishment of diplomatic relations between India and Israel in 1992, bilateral trade and economic relations have grown from $200 million in 1992 to $6 billion in 2013. Between Modi's election in May 2014 and November 2014, Israel exported $662 million worth of Israeli weapons and defense items to India. This export number is greater than the total Israeli exports to India during the previous three years combined.
Israel is also expanding ties with Latin America and has been granted observer status in the Pacific Alliance, an economic trade organization of several major Latin and Central American countries. One country that Israel has had testy relations with because of the bombing of the Israeli embassy in 1992, and the government’s failure to bring the perpetrators to justice, is Argentina. Still, economic relations are growing as evidenced by the Argentine army’s $111 million contract with Israel in 2015 to upgrade 74 tanks made in Argentina.
Israel’s discovery of a large reserve of natural gas off its Mediterranean coast has also opened new opportunities for expanding trade with its neighbors. Jordan, for example, signed a $15 billion deal for Israeli natural gas, and a $1.2 billion agreement was struck with Egypt. A good example of how politics does not always interfere with economics is the ongoing trade relationship between Israel and Turkey. While once close, ties between Ankara and Jerusalem grew strained as Turkish President Erdogan became more stridently critical of Israel. Nevertheless, the free trade agreement between the two countries is still in effect, and trade with Turkey hit a record of more than $5 billion in 2014, a 50 percent increase over 2009.
One of the countries hostile toward Israel that nevertheless engages in trade is Malaysia. The trade is largely one-sided, almost entirely Israeli exports, but the overall value of trade exceeds $1.5 billion, nearly double what it was as recently as 2012. Similarly, although the amount is relatively trivial, the fact that the value of Israel’s trade with Indonesia is as much as $250 million is another reflection of business trumping politics.
In addition to trade, foreign investment in Israel has grown rapidly despite a brief downturn in 2014. More than 10,000 U.S. companies do business in or with Israel, including all the major high-tech companies. Intel, for example, which already has a large presence in Israel, invested $6 billion in its plant in Kiryat Gat.
Americans and other foreign investors do not invest in Israel because they are Zionists; they do it because it is a great place to do business with a creative and highly skilled pool of talent. Consider just a few of the deals concluded by American companies:
Warren Buffet invested $6 billion to buy Iscar – his first major acquisition outside the U.S. Cisco paid $5 billion for software developer NDS. Pratt & Whitney spent several hundred million dollars to buy Blades, one of the world’s largest producers of machine blades. Google paid $1 billion for the Waze mapping company. IBM bought Trusteer, a fraud prevention company for approximately $800 million. Facebook paid $200 million for a startup called Onavo. Between 2003 and 2012, 772 Israeli startups were acquired for $41.6 billion. Furthermore, despite boycott threats, Israelis are not hiding their identification with Israel. According to Economy Ministry figures, 760 Israeli manufacturers labeled their products marketed abroad as “made in Israel” in 2013; that number increased to 1,024 in 2014.
Kristin Lindow, senior vice president at Moody’s Investors Service and Moody’s lead analyst for Israel, told Forbes in February that “the impact of BDS is more psychological than real so far and has had no discernible impact on Israeli trade or the broader economy.” In fact, Moody’s chief economist, Dr Mark Zandi, told Globes in May that Israel has “one of the world’s best economies.” Elaborating, Zandi notes that Israel’s “fiscal situation is better than ever, the debt-to-GDP ratio is low and continues to fall, your economy has been growing for 15 straight years, and there's almost no unemployment.”
So who is being hurt by the BDS movement? The Palestinians, of course. “The sanctions do run the risk of hurting the Palestinian economy,” Lindow noted, “which is much smaller and poorer than that of Israel.” The campaign against SodaStream, for example, may have made activists abroad feel good, but it was devastating to the hundreds of Palestinians who will probably be fired when the company moves its factory from Maale Adumim to the Negev.
THE STARTUP SCENE IN ISRAEL IS GOING BONKERS,
AND THE CHINESE ARE SWOOPING IN
Julie Bort
Business Insider, Aug. 13, 2015
This summer, it’s raining unicorns — tech startups valued at more than $1 billion — and as a result the Israeli tech scene is going absolutely crazy. Business Insider just spent a week in Israel meeting with over a dozen tech companies and VCs. They all told us: Everyone is dreaming of becoming the next unicorn. Instead of selling their startups for $1 million to $30 million, founders are turning down multimillion acquisition offers, wanting to build big companies.
2015 is a record-breaker for VC funding. For the first half in 2015, 342 companies have attracted $2.1 billion, up from 334 companies nabbing $1.6 billion in the first half of 2014. The private-equity bankers have arrived in droves, including Blackstone, SilverLake, KKR, Apax Partners, TPG, JPMorgan, and Morgan Stanley, and they're writing huge checks. Chinese investors are swarming the country, joining Israeli VC funds as limited partners as well as doing a lot of huge, direct investments into startups, too.
"If we're going to do $4 billion in venture in 2015, the estimate I heard is that at least $500 million of that will be Chinese money, and that’s direct investment not including the LP stuff," Israeli powerhouse VC Jon Medved told Business Insider. "And I think that’s probably underestimated.” Medved, founder of investment startup OurCrowd, is widely known as one of the fathers of Israel’s tech-startup scene.
Chinese investors are “at all the parties” a startup founder told us. The joke here is that Israeli border control needs to open up a special customs line “just for Chinese investors with bags of money that they can just get in the country for free,” Medved quipped. This hot economy has led to … Big, well-funded Israeli companies starting to acquire other Israeli companies for big sums of money, too. The first crop of Israeli serial entrepreneurs, such as Avigdor Willens, who sold Annapurna to Amazon earlier this year for a reported $350 million to $375 million. Willens sold his first company, Galileo, for $2.7 billion in stock back in 2000 to Marvell Technologies.
When Google bought Waze for $1 billion in 2013, it was a milestone event for the country, says Medved.
“Billion-dollar companies are now all over the place. Waze was the first and most important,” he told us.
Waze cofounder Uri Levine explained to Business Insider, “This was the first time a billion-dollar app, and a consumer app, came out of Israel,” and it set “a new beacon for Israel” telling entrepreneurs to aim higher than a quick exit.
The next year, Japan's Rakuten (the eBay of Japan) acquired Israeli messaging app Viber for $900 million, and unicorn fever in the country began. Over and over, startup founders told us they had no interest in selling their successful companies — some of which were doing millions of dollars in revenue, and some of which were doing hundreds of millions in revenue. They wanted to grow their companies past $1 billion to many billions.
“Israel entrepreneurs are obsessed with building unicorns,” Hillel Fuld, CMO of Israeli startup Zula told us.
Billion-dollar startups include … Taboola (who raised $117 million in February, $157 million total), IronSource (who raised $105 million in two rounds from private-equity funds run by JPMorgan and Morgan Stanley), Outbrain (who filed confidential SEC documents for an IPO at a reported $1 billion valuation), Conduit, who said it was the first Israeli internet unicorn, in 2012
There’s also a new crop of public tech companies worth $1 billion: MobileEye: IPO’d in 2014, $12 billion market cap today, CyberArk: IPO’d in 2014, market cap of about $2 billion, Wix: IPO’d in 2013, market cap of about $900 million, And there are some half-unicorns, like Varonis Systems, which IPO’d in 2014 and has a market cap of nearly $600 million — nothing to sneeze at. "The Asia stuff is very dramatic, very real and very new," says Medved. "China is the big story. But Japan, for example — there had never been a visit of a Japanese prime minister to Israel before, in all the years of Israel’s existence. What did they have to come here for? This year, the Japanese prime minister shows up for four days, all tech.”
Meanwhile, Korea’s Samsung Ventures has now made "eight investments here over the last year," says Medved. Plus, "there are now Israeli companies going to list on the Singapore exchange." Israel will also be hosting the Indian prime minister for the first time. In February, Indian company Infosys (now run by SAP’s former US CTO Vishal Sikka) bought Israeli company Panaya for $200 million. India has plans to build a research and development center here.
Still, China overshadows them all. Investments are pouring in from Baidu, Fosun, Alibaba, Tencent, RenRen, and others. Famous Chinese angel investor (and billionaire) Li Ka Shing and his Horizon Ventures fund are all over the country. Horizon was an early investor in Waze. And he’s invested in about 29 Israeli startups, including Waze founder Levine’s latest baby, FeeX, (raised $9 million).
If there's a downside to all of this, it's that Israel is starting to experience a severe talent shortage. They are now poaching each other's employees and trying to keep employees from leaving by offering better and better Valley-like perks. IronSource, for example, flies its 550 employees to one exotic off-site meeting every year. The whole company just got back from Greece. "Once a year, we party," CEO Tomer Bar Zeev told us. "That builds culture. It's one of the best investments we can make, investing in the company."
If that fails, Chinese billionaire Li Ka Shing has an answer. He also donated $130 million to Israel’s Technion, the Israeli Institute of Technology (like the MIT of Israel), one of the largest ever donations received by an Israeli university.
INDIA SEEKS ISRAELI HELP TO BECOME NEXT “START UP NATION”
Legal Insurrection, Aug. 18, 2015
While Europe has been busy targeting Israeli researchers, artists and filmmakers in recent days, Asian countries like India, China and Japan are taking tangible steps strengthening its ties with Israel. Last week Norwegian Film festival rejected an Israeli film dealing with disability on the grounds that it “did not deal with occupation” or “discrimination of Palestinians.” In Spain, a music festival barred the Jewish-American reggae star Matisyahu for refusing to comply with the demands of the organizers to publically denounce Israel and endorse the “Palestinian cause” — in keeping with the best traditions of Spanish Inquisition. In Paris “peace activists” threatened and harangued visitors attending a day-long festival celebrating Tel-Aviv’s culture with music and gourmet.
Meanwhile in India, thousands gathered to see the opening on yet another Israeli Agriculture Technology Centre in Gujarat State.
Israel runs 30 such centres across India, training farmers in latest agriculture technology and farming techniques. On the occasion India’s 69th Independence Day on August 15, 2015, Prime Minister Narendra Modi launched the initiative “Start Up India, Start Up India”, aimed at encouraging individuals to start new ventures and businesses — not just in technology sector. Israel’s Ambassador to India H.E. Mr. Daniel Carmon expressed his country’s support in helping India achieve those aims.
Israel’s Prime Minister Netanyahu welcomed India’s initiative to promote start ups, and attributed growing India-Israel ties to the entrepreneurial spirit of both people. Talking to an Indian television channel PM Netanyahu said: Speaking exclusively to NDTV [PM Netanyahu] said the countries are forming “a wonderful friendship”. Days after Mr Modi announced “Start Up India, Stand Up India” as a mission to launch and nurture entrepreneurs, Mr Netanyahu, whose country is known for its start-up culture, said, “As far as the ‘start up-nation’ (goes), I think this has a lot to do with entrepreneurial spirit. I have noticed that in Silicon Valley… You hear Indian dialects and you hear Hebrew… There is a lot of spirit for enterprise in both our countries.”
Israel is India’s key partner when it comes to start ups, academic and scientific research. This year alone, Indian multinationals have invested millions in Israeli start up and innovation ecosystem, hoping to hires the best talent and acquire cutting-edge technology. India’s private sector involvement in Israel also includes setting up technology incubators and investments in Universities. Israel too has launched programmes for Indian students, innovators, researchers as well as corporate executives. Every year selected Indian start up founders get a chance to attend the prestigious start-up event “Start Tel Aviv 2015” and connect with Israeli and international leaders in the field. Israel’s Council for Higher Education offers hundreds to scholarships to Indians interested in pursuing higher education in Israel.
Israel-Asia Centre also offers scholarship and leadership programmes to Indian students. The Jerusalem-based centre also runs a MBA and leadership-program exclusively dedicated to Indian women entrepreneurs, giving them skills and exposure to become future leaders in Corporate India. For a developing country like India, unlocking entrepreneurial potential will be key to its prosperous future. The ‘good old capitalism’ still remain only viable way of reducing poverty and misery known to man. Hundreds and millions have been lifted from extreme poverty in India and China alone, since these two countries shifted from state-controlled socialist economy to open market capitalism.
India has a long way to go, overcoming its 5 decades-long socialist legacy. Bloated bureaucracy and absurd regulations still stifle country’s entrepreneurial spirit, technological innovation, and industrial growth. But giving credit where it’s due, Prime Minister Modi has taken right steps by cutting regulations and reducing state control on the economy. He is also the driving force behind India’s recent pivot to Israel.
DRIVEN BY THE MOTHER OF AMBITION: TYCOON YOSI VARDI ON
THE CULTURE THAT FORGED £25BN PHARMA DEAL
Rupert Steiner
Daily Mail, July 29, 2015
He is known around the world as the godfather of the start-up industry. Angel investor Yossi Vardi made £250million selling instant messaging application ICQ to AOL in 1998 at the height of the dotcom boom. Since then, he has invested in 86 firms and his career is seen as a model for entrepreneurs and investors across the globe. But his recipe for business success might be impossible to replicate in the UK. The ingredients, he says, include having a pushy Jewish mother, a defiant attitude to authority and being conscripted into national service in the army.
Israel’s business sector has been electrified this week by the £25billion deal by local firm Teva Pharmaceuticals to buy the generic drug unit of rival US firm Allergan. But in Vardi’s eyes this is not a one- off – he says Israel is a crucible for entrepreneurialism. He is certainly an authority, having served as a strategic adviser to online giants AOL and Amazon and co-founded Alon – Israel’s largest energy company. He is also a member of the prestigious World Economic Forum.
The tycoon, 73, says: ‘I sold 25 of the 86 start-ups. That makes me the most successful angel investor in Israel, but 27 went bust which also makes me the worst.’ An expert on the technology sector and an accomplished speaker, Vardi says Israel spawns 1500 new firms a year with 10 per cent of the workforce involved in start-ups. Are there any lessons there for the UK, which is keen to foster a more entrepreneurial culture? A key factor is that there is more investment in research and development in Israel as a percentage of gross domestic product than in any other country, at 4.5 per cent. South Korea is second at 4 per cent and Finland, third, is slightly below that. Here in the UK we invest just more than 1.5 per cent.
Ambling into a meeting room overlooking the Tel Aviv seafront, the septuagenarian takes his place at the head of the table, casually dressed with a silver chest-rug bristling through his open necked shirt. Alone and without any flunkies he eschews the trappings of wealth and comes across as more like a stand-up comedian than business leader. The country’s army of difficult-to-please Jewish mothers is what he claims is behind Israel’s success in propagating more driven and determined entrepreneurs than anywhere else in the world. ‘The phenomenon of the Jewish mother is our secret sauce,’ he says. ‘There seems to be some kind of genetic disorder that means from the age of five we are told unless you are able to win at least one Nobel prize you will heap disappointment on the family.’
It is one of the most unlikely factors behind the start-up phenomenon and it is also impossible for any other government to emulate. ‘Jewish mothers are never satisfied and nothing is ever good enough,’ he continues, adding that his mother used to compare him with his cousins and conclude that he was ‘an idiot and for most of my life I have been trying to show her I’m not. I keep on trying even now’. Vardi’s mother died 15 years ago. A high proportion of entrepreneurs the world over have been driven by proving to a teacher or parent, who had put them down, that they were wrong.
Many also suffered bereavement at an early age and have spent their life hopelessly trying to prove their worth to the dead parent. A former civil servant, Vardi previously served as Israel’s youngest director general of the Ministry of Development, having been appointed at the age of 27. He is often asked ‘what is it that you put in the water’ in Israel, what’s the spark for start-ups? He says: ‘Culturally everyone is motivated – and everyone wants to become an entrepreneur – it’s almost genetic.’..
[To Read the Full Article Click the Following Link—Ed.]
Israel’s Cabinet Approves Regulatory Scheme for Gas-Field Development: Sara Toth Stub, Wall Street Journal, Aug. 16, 2015—Israel’s cabinet Sunday approved a regulatory framework that will allow the stalled development of its large offshore natural gas fields to resume.
Israel Turns to Kurds for Three-Quarters of its Oil Supplies: David Sheppard, John Reed & Anjli Raval, Financial Times, Aug. 23, 2015 —Up to three-quarters of the oil supply in Israel was reported from Iraqi Kurdistan, a Financial Times report said Sunday.
Israeli Geneticists Offer Exam to Presage Cancer 15 Years Prior to Earliest Symptoms: Jewish Press, Aug. 17, 2015—A genetic analysis laboratory in Katzrin, in the Golan Heights, has announced a new development allowing the identification of an inherited predisposition to prostate and other cancers in families with a history of cancer—a full 10 to 15 years before any symptoms of early cancer are presented.
Improving Ties Between India and Israel: Prof. Efraim Inbar, BESA, Aug. 6, 2015 —Relations between India and Israel are changing and improving. It was recently announced that Indian president Pranab Mukherjee will hold a state visit to Israel in October, while Prime Minister Narendra Modi is also expected to visit – the first visit of an Indian prime minister to Israel – early next year. In February 2015, Israeli defense minister Moshe Ya’alon visited India, during which the two countries finalized a major defense deal worth more than $1.5 billion.
